Req 1Req 2AReq 2BPrepare a contributlon format Income statement segmented by dlvislons.DivisionTotal CompanyEastCentralWestReq 1Req 2AReq 2BThe Marketing Department has proposed increasing the West Division's monthly advertising by $22,000 based on the beliefthat it would increase that division's sales by 13%. Assuming these estimates are accurate, how much would the company'snet operating income increase (decrease) if the proposal is implemented? (Do not round intermediate calculations.)Net operating income willbyReq 1Req 2AReq 2BWould you recommend the increased advertising?OYesNo Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its mostrecent monthly contribution format income statement:$ 1,480,000582,700SalesVariable expensesContribution marginFixed expenses897,300987,000Net operating income (loss)$(89,700)In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, theAccounting Department has developed the following information:DivisionEastCentralWest$350,00051%Sales$630,000$500,00034%Variable expenses as a percentage of salesTraceable fixed expenses38%$277,000$340,000$191,000Required:1. Prepare a contribution format income statement segmented by divisions.2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $22,000 based on the belief thatit would increase that division's sales by 13%. Assuming these estimates are accurate, how much would the company's net operatingincome increase (decrease) if the proposal is implemented?2-b. Would you recommend the increased advertising?

Contribution margin income statement shows variable costs and fixed costs in such a manner so that…

Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: $ 1,480,000 582,700 897,300 987,000 Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) $ (89,700) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division East Central West $350,000 51% Sales $630,000 $500,000 Variable expenses as a percentage of sales Traceable fixed expenses 34% 38% $277,000 $340,000 $191,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $22,000 based on the belief that it would increase that division's sales by 13%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? 2-b. Would you recommend the increased advertising?

Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: $ 1,480,000 582,700 897,300 987,000 Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) $ (89,700) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division East Central West $350,000 51% Sales $630,000 $500,000 Variable expenses as a percentage of sales Traceable fixed expenses 34% 38% $277,000 $340,000 $191,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $22,000 based on the belief that it would increase that division's sales by 13%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? 2-b. Would you recommend the increased advertising?

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter21: Variable Costing For Management analysis

Section: Chapter Questions

Problem 15E

See similar textbooks

Similar questions

Hi please help with the screenshots and this follow up question 2) The Marketing Department has proposed increasing the West Division's monthly advertising by $21,000 based on the belief that it would increase that division's sales by 16%. Assuming these estimates are accurate, how much would the company's net operating income increase or decrease if the proposal is implemented?
Kyle Corporation provides the following information for the Product Division and Service Division for the year. Product Division Service Division 420,000 $ 650,000 195,000 245,000 640,000 610,000 14.0% 14.0% Net sales Operating income Average total assets Target rate of return $ Requirement 1. Calculate the return on investment for each division. (Enter answers as a percent rounded to the nearest hundredth percent, X.XX%) The return on investment for the Product Division is The return on investment for the Service Division is Requirement 2. Which division has the highest ROI? % % Requirement 3. Calculate the residual income for each division. (Round answers to the nearest whole dollar.) The residual income for the Product Division is The residual income for the Service Division is Requirement 4. Which division has the highest residual income?
devrat
Case 1: ROI You are comparing the performance of two (2) separate divisions, segments A and B, using ROI Analysis. A B Sales P100,000.00 P500,000.00 Operating Expenses 30,000.00 300,000.00 Net Operating income 70,000.00 200,000.00 Average Operating Assets 10,000.00 40,000.00 Required: Using ROI Analysis, which segment is performing better? To answer this question, you need to: Compute the ROI of each segment and Compute the components of ROI of each segment
Problem 15-49 (Algo) Segment Reporting (LO 15-5) Midwest Entertainment has four operating divisions: Bus Charters, Lodging, Concerts, and Ticket Services. Each division is a separate segment for financial reporting purposes. Revenues and costs related to outside transactions were as follows for the past year (dollars in thousands). BUS Charters $11,700 7,950 Ticket Revenues Costs Lodging Concerts Services $4,520 3,360 $5,400 3,550 $1,600 1,500 Bus Charters Division participates in a frequent guest program with Lodging Division. During the past year, Bus Charters reported that it traded lodging award coupons for travel that had a retail value of $1.3 million, assuming that the travel was redeemed at full fares. Concerts Division offered 20 percent discounts to Midwest's bus passengers and lodging guests. These discounts to bus passengers were estimated to have a retail value of $360,000. Midwest's lodging guests redeemed $130,000 in concert discount coupons. Midwest's hotels also…
The following are selected data for the division for the consumer products of ABC Corp for 2020: Sales P 10,000,000 Average invested capital 4,000,000 Net Income 400,000 Cost of Capital 8% What is the return on sales for the division? 4% 8% 10% 20% Group of answer choices 1 2 3 4
Consider the following data from two divisions of a company, P and Q: Divisional P Q Sales $ 1,100,000 $ 1,600,000 Operating Income $ 440,000 $ 960,000 Investment $ 1,870,000 $ 3,040,000 If the minimum rate of return is 12%, what is Division P's residual income (RI)? Multiple Choice $1,817,200. $215,600. $1,047,200. $664,400. $875,600.
The following are selected data for the division for the consumer products of ABC Corp for 2020: Sales P 10,000,000 Average invested capital 4,000,000 Net Income 400,000 Cost of Capital 8% What is the return on sales for the division? 1. 4% 2. 8% 3. 10% 4. 20% O 1 O 2 O 3 O 4
Please help me
The following data are available for two divisions of Solomons Company. North Division $10,535,000 49,000,000 South Division $ 47,460,000 339,000,000 Division operating profit Division investment The cost of capital for the company is 8 percent. Ignore taxes. Required: a-1. Calculate the ROI for both North and South divisions. a-2. If Solomons measures performance using ROI, which division had the better performance? b-1. Calculate the EVA for both North and South divisions. (The divisions have no current liabilities.) b-2. If Solomons measures performance using economic value added, which division had the better p c. Would your evaluation change if the company's cost of capital was 17 percent? 1. When evaluated by ROI? 2. When evaluated by EVA? Complete this question by entering your answers in the tabs below. Req A1 Divisions North South Reg A2 estion 12- Hom... Calculate the ROI for both North and South divisions. (Enter your answers as a percentage rounded to 1 de 32.1).) ROI Req…
The following are selected data for the division for the consumer products of ABC Corp for 2020: Sales P 10,000,000 Average invested capital 4,000,000 Net Income 400,000 Cost of Capital 8% What is the return on investment for the division? 1. 2% 2. 4% 3. 8% 4. 10% 0 1 O 2 O 3 O 4
bvsg